Paying Off Our Mortgage Early: A Journey of Mixed Emotions and Financial Lessons

The Elation of Paying Off the Mortgage

I vividly remember the moment I paid off my house—it was as if a weight had been lifted off my shoulders. Sitting in a Costco parking lot, I hung up the phone with a sense of elation. My husband and I had worked tirelessly for years to achieve this milestone, and the feeling of financial freedom we anticipated was overwhelming. With the extra $1,100 in our pocket each month from no longer having a mortgage, we envisioned a life of luxury—fancy dinners, new clothes, and a newer car. We even planned to save more and invest in our future. At 30 years old, I genuinely believed that paying off our mortgage would be the key to a drastically different, more relaxed life.

The Hard Work Behind Paying Off the Mortgage

Our journey to pay off the mortgage began in 2011 when we purchased a foreclosed property for $150,000, taking advantage of low house prices and interest rates following the housing crash. We dreamed of escaping the daily grind, and paying off our mortgage seemed like the path to achieving that. To accelerate the process, we took on side jobs and refinanced our 30-year mortgage to a 15-year one, which allowed us to pay off more than 30% of the loan in just three years. Then, an unexpected opportunity arose—a settlement check from a car accident I had been involved in, which could have covered 80% of the remaining mortgage. However, when the moment of truth arrived, we hesitated.

The Financial Advisor’s Advice: A Lesson in Opportunity Cost

We consulted a financial advisor, who recommended keeping the mortgage and investing the settlement money instead. He explained that our mortgage had a relatively low interest rate of 3.25%, and investing the money could yield a higher return. I policing his advice at first. The idea of having no mortgage and achieving "financial freedom," as personal finance expert Dave Ramsey often preaches, was deeply appealing. But the advisor’s words stuck with me.

A Compromise and the Final Push to Pay Off the Mortgage

In the end, we found a middle ground. We used part of the settlement money to max out our Roth IRAs for the year and set aside three to six months of expenses in a savings account, as the advisor had suggested. The rest went toward the mortgage, and within three years, we had fully paid it off. The sense of accomplishment was immense, and the extra cash flow each month felt liberating. I even set up a budget using the EveryDollar app and opened investment accounts like Robinhood and Betterment, determined to make the most of our newfound financial flexibility.

Expectations vs. Reality: The Surprising Truth

However, the financial freedom I had envisioned didn’t quite materialize. Life had other plans. The expenses kept piling up—car maintenance, home repairs, and ever-increasing property taxes and homeowners insurance. These costs added up to the equivalent of several months’ worth of our old mortgage payments each year. While I’m grateful for the security of owning our home outright, I couldn’t help but feel that the money we saved on the mortgage often disappeared into other unexpected expenses.

The Silver Lining: Peace of Mind and Long-Term Growth

Looking back, I realize that paying off the mortgage wasn’t entirely futile. One undeniable benefit was the peace of mind it brought. When my husband was laid off in 2024, we were able to survive on a tight budget, relying on our savings and avoiding debt. Additionally, the financial advisor’s advice proved correct. The money we invested in our Roth IRAs grew at an 8% rate, outperforming the 3.25% interest we would have saved on the mortgage. In hindsight, we might have been better off keeping the mortgage and investing more. Still, owning our home outright has given us a sense of security and stability that is hard to put a price on.

This experience taught us a valuable lesson: financial freedom isn’t just about cutting expenses or eliminating debt—it’s about balancing short-term goals with long-term growth. While paying off the mortgage didn’t unlock the life of luxury we had imagined, it did provide a foundation of stability that we continue to build on today.